While traditional bookstores around the world are currently facing challenges as a result of declining sales and traffic, bookstores in China are experiencing a revival, which is credited to one of the biggest e-commerce platform in the country, JD.com. The platform has its own online book venture, but they are also providing help to 49 bookstores as far as logistics, book procurement, as well as technology. Providing solutions to book stores around China is part of JD.com’s strategy entitled “Retail as a Service”, under which they provide various services and necessary technology to companies from different industries.
The founder of Tangning Bookstore, Ningxin Lu talked about the partnership between JD.com and Tangning, stating that without the help of their technology as well as supply chain expertise, Tangning business would not have competitive advantage as far as the traditional mode is concerned. One significant partnership that resulted from the RaaS strategy has been between JD.com and Tangning Books. The two companies partnered in May of 2017, and they sourced all the books using JD’s inventory, and using the e-commerce platform’s in-house logistics ended up saving costs and also cutting on delivery delays.
As a result of the partnership, Tangning experienced an increase in sales of 30% from May to the end of the year, and its profits also increased by 17% over that period. Tangning Books was also able to reduce turnover from one year to 220 days, and having access to JD.com’s data analysis capabilities, Tangning now has insight about buying behaviors, and they are able to choose book assortments that are tailored to the company’s customer base, which in turn leads to more sales. While offline book stores have to deal with the fact that they can not stock every book that their customers might as for due to the limited space they have available, Tangning Books can now let customers scan QR codes for every book that they can not find in store, and they can get it delivered within 24h from the inventory of JD.com instead. This allows both companies to work together in order to create an endless aisle when it comes to the choices they offer their customers.